| A conversation with TML journalist K.C. Adams on the contradiction between use-value and exchange-value, which causes much confusion regarding the funding and realization of health care, education, mass transit and other public services. *** What is the difference between use-value and exchange-value? The first duty is to clarify our thinking of the historical context and how the issue poses itself. The contradiction, which confronts us today, arises within the capitalist system and not in some fanciful way outside that historically determined system. The capitalist system imposes the contradiction outside our will and we have to accept that fact and deal with it consciously. The global monopolies that now control the capitalist system and have subordinated the state to serve their narrow private interests, view the working class merely as a productive force at their disposal similar to how they view machines, steel scrap or any other means of production. The public authority, as far as it can now be called public, is used to pay the rich, to serve the most powerful monopolies and ensure the working class, raw materials, social institutions and public treasury are at their disposal. The working class neither accepts its position as a means of production and use-value within the capitalist system nor ignores the reality as it presents itself. Understanding of how the capitalist system places workers into a wage-slave category as a use-value to be exploited deepens the theory necessary to guide the class struggle of the working class out of its historical predicament as an enslaved class and open the path forward to emancipation. For a use-value to be of use within the socialized economy, as a means of production, article of consumption or service, it must first be transformed into an exchange-value for sale and then realized, a technical term meaning sold. Once realized, the exchange-value is transformed back into a use-value for use in production or as an article of consumption or service. Does the use-value change in some way when transformed into an exchange-value? The change is in the economic category the capitalist system imposes on a commodity, for example a television or human being. The use-value of a television is found in its capacity to relay or project transmitted images and sound. The use-value of a human being is found in the capacity to work, to produce and reproduce life and all that is necessary to sustain human beings. As exchange-value, the television and human being both exist as a general equivalent of money and have no use other than as means of exchange for money. The exchange-value of a television cannot project images and the exchange-value of a human being has no capacity to work. Both are called values. What are some other differences and how are their values determined? Use-values vary dramatically one with the other in quality, such as the difference between a television and a human being. Exchange-values do not differ in quality only in the quantity of money. Another difference between use-value and exchange-value appears in how and in what form the value of each is determined. The value of use-value is determined as the average work-time necessary to produce a particular commodity, the work-time contained within it. The use-value of a television can only be compared with a human being using the medium of average work-time congealed or contained within both. The use-value of each represents the amount of work-time necessary to produce a television and to produce a human being and its capacity to work. Obviously, some televisions contain more or less value than others, and some human beings who are better educated, trained and experienced contain more value than others who have not received the same input of value from social programs and their families. In this sense, the use-value of humans varies one from the other. Yes, human beings are unequal in use-value and in other ways such as the accident of birth, social class position, wealth and ability both mentally and physically. That is one reason a modern constitution must give the sovereign people through their state the power to deal with the inequality of humans and the power this inequality bestows on individuals to exploit and oppress others. This is especially important at this time in history when socialized humanity is struggling to go beyond the capitalist class system and its relations of production based on private ownership of competing parts of the socialized economy. We are not born equal as the outmoded U.S. Constitution says but unequal. Under capitalism, the inequality continues to grow without restrictions becoming class privilege of monstrous proportions. How about the value of exchange-value? In contrast with use-value, the value of exchange-value under monopoly capitalism is determined partly through the spontaneous working out of prices of production, which both affects supply and demand, and is affected by it, and through direct intervention of the most powerful monopolies to serve their narrow interests. Price fixing and currency manipulation are important tools they use. All this is very chaotic and destructive contributing to economic crises. In contrast to the chaos, conscious intervention in pricing does occur to serve nation-building and stability in an economic sector such as the supply management of dairy, eggs and poultry in Canada. Prices under supply management are determined according to a formula agreed upon by the participating producers, academics and government. The pro-social form of pricing is under serious neo-liberal attack in particular now with the Harper dictatorship joining the campaign for the Trans Pacific Partnership, which says all supply management systems must be destroyed. The Harper dictatorship has already wrecked the single marketing desk of the Canadian Wheat Board, which controlled prices and markets in favour of stability for the vast majority of grain farmers. These attacks on both supply management and the conscious use of scientific formulas to determine prices are at the behest of the most powerful global monopolies that want unrestricted monopoly right to control entire sectors of the economy around the world to serve their narrow interests. Could you briefly discuss money? Money is a universal medium of exchange serving the capitalist system. The ruling capitalist class through fiat and tradition imposes a currency and establishes its relative value with other currencies to serve its class interests in both competition and collusion with rival capitalists. Similar to prices, the most powerful monopolies manipulate currencies to serve their narrow interests. Parasite billionaires, such as George Soros and his group have targeted certain currencies to profit from the havoc created in an economy or economies such as in the UK in 1992 and Malaysia and Thailand in 1997, which became part of a wider Asian financial crisis of 1997. To speak more specifically, the exchange-value of a television can be equated or compared with the exchange-value of a human being through the medium of money. However, the market price for exchange-value fluctuates above and below its value depending on both the general economic conditions and the specific conditions within a sector or even for a particular commodity. For example, the market price for the human commodity swings according to the class struggle above and below its value. The value of the human commodity is established as a standard of living over a period and is subject to fluctuations according to economic crises, war, class struggle and politics. At present under the conditions of the retreat of revolution and neo-liberal globalization, the value of the human commodity is under downward pressure from the extortion of the monopolies and states in their service. A relation is established over time between use-value measured in work-time and exchange-value measured in money. The use-value of a commodity in work-time should approximate its exchange-value in money. That is why peasants in the feudal markets of petty production would haggle so determinedly over prices because they knew from experience how much work-time went into their own products for sale and into most of the commodities they needed to buy and the relation of their work-time to money. Today, no effort is made to make a scientific comparison between use-value measured in work-time and exchange-value measured in money. Everything is kept deliberately vague and anti-conscious, as this assists the continued control of monopoly capital over the socialized economy. Because of the control of finance capital and its manipulation of prices to suit the narrow interests of a powerful privileged elite, prices often vary widely from their measurement in work-time. Monopoly manipulation of prices extends the control of monopolies over wider swaths of the economy, concentrating wealth and power in fewer hands. To perpetuate their manipulation of prices, monopoly capital fiercely opposes public control of the wholesale sector, which could introduce a conscious and socially responsible modern scientific formula to determine prices of production and market prices. Some readers will wonder why you lump together a television and human being as examples of use-value and exchange-value. Because they are both examples of capitalist commodities. The human example in particular goes to the heart of the confusion with the contradiction between use-value and exchange-value. Some people refuse to face the historical context in which humans find themselves. Instead, they mediate in fanciful ways their perception of the reality as it exists under capitalism. Within the socialized economy, the use-value of the television and human being is useless without first being transformed into an exchange-value and realized (sold) in the capitalist market. Once realized, the exchange-value is transformed back into a use-value but with the new quality of being ready for use, as it is in the possession of someone who has paid for the exchange-value of a commodity because they want its use-value. Now I say someone wants its use-value only guardedly because under monopoly capitalism this is often not the case. Speculators purchase exchange-value not for its use-value but to throw it on the market for another exchange hopefully at a higher price. To squeeze out money for themselves or their employers without producing anything, they exchange currencies and stocks using powerful computers and bundle exchange-values together as bonds such as they did in the U.S. with mortgages, which exploded in chaos in 2008. This frenzied redistribution of already produced value, not only on exchanges but also by directly involving the people in casinos and endless lotteries, is a symptom of the parasitism and decay of monopoly capitalism that is a big problem causing havoc in the socialized economy. Trying to squeeze more and more money out of the same produced value or printing more and more money without a similar increase in production and services is a recipe for disaster but that is the reality of monopoly capitalism. It would seem the use-value of a commodity before and after exchange is different. Before exchange, the use-value only has potential while after exchange it can be consumed. Under capitalism, the use-value of a commodity is useless unless realized through exchange. The use-value of an unemployed worker or unsold television sitting as inventory in a warehouse is useless until transformed into exchange-value and realized on the capitalist market. Once the unemployed worker is purchased and transformed back into use-value for use by the purchaser as an employed worker, the use-value of the worker is unlocked and works its magic. You say magic because human use-value can produce more than its congealed value. Yes, the human use-value transfers a portion of its congealed value according to the time working but also produces an additional value, something non-human commodities cannot do. The quality of human use-value is such that it not only transfers a portion of the value contained within the worker during the time spent working called transferred-value but also produces additional value beyond its value during the time working called added-value. Under the capitalist relations of production, the transferred-value and the added-value produced beyond the value of the human commodity become the property of the purchaser or owner of the worker's use-value at that time, either a private or a public enterprise. This qualitative difference between the use-value of a worker and television when realized as exchange-value and transformed back into use-value by a purchaser is important to understand. Yes, a very big difference exists between realized human use-value and all other realized use-value. This difference sets humans apart from not only things such as televisions but other animals and species as well, some that we use as food or working animals. Within the economy, this difference is the ability or quality of humans to produce value beyond the use-value that has been put within workers through their upbringing, the necessities of life, their particular education and experience. Workers produce value in addition to their transferred-value; this is important to grasp. Both the transferred-value and added-value produced by workers become the property of the purchaser of the exchange-value, either a private or a state capitalist owner of means of production. The amount paid for the exchange-value of the human commodity comes out of the total value produced by workers, the sum of transferred-value and added-value and goes to the individual worker as wages and the state through taxes. The amount is constantly in flux. When consumed, a television can transfer only the value of its use-value and not more or less. When the use-value of human beings is consumed, workers transfer not only their use-value but also an additional value. They reproduce the full amount of their use-value for the time working but also produce a certain value beyond the amount of their use-value. What again are the terms for these types of value that workers produce? The value of the use-value of any commodity when consumed is called transferred-value. The additional value workers produce beyond the amount of their use-value is called added-value. The transferred-value of an article of consumption, such as a television should approximate its use-value and the exchange-value paid for it, unless of course the purchaser was fleeced or received a great deal. When a commodity is consumed as means of production, such as electricity, the use-value of the electricity is transferred into the commodity being produced. This use-value should approximate its exchange-value and the amount the purchaser paid. When the newly produced commodity is realized, the transferred-value of the electricity contained within the new commodity should be fully returned to the purchaser of the electricity. The same is true for machinery except that the use-value is transferred little by little over time similar to human use-value. This entire process, which used to occur spontaneously during nascent capitalism during the nineteenth century, has been disrupted by monopoly right and control. Monopoly manipulation of the economy and use of the state machinery and public treasury for narrow private interests are important factors why economic crises have become more severe and long lasting. Looked at objectively, the transferred-value of means of production should not be considered costs of production as the price paid as exchange-value should be fully recouped when the new commodity is realized. Aside from the issue of uncertainty as to whether or not the commodity will ever be sold, which is another big problem for capitalism, the time between purchasing the means of production, transferring it into a new commodity and realizing that commodity is a question. Within a modern formula of price of production, the time involved is factored into the transferred-value making it slightly more than the exchange-value. In this way, transferred-value cannot be considered a cost of production. In a similar way, the transferred-value from workers together with their added-value when producing and providing services can in no way be considered a cost of production. Can you go into this in more detail? The value of the worker's use-value consumed during the period working is transferred into the work, either means of production or articles of consumption and services. The value of the worker's use-value when consumed is fully transferred into the work and rightly called transferred-value. When the result of the work is realized, this value is returned to the capitalist purchaser of the worker's exchange-value and consumed as use-value. The same is true for any other means of production when consumed in work. The concept of cost for transferred-value within the socialized economy conveys an inappropriate sense and should be replaced. The purchase price of means of production, including workers, cannot be considered a cost of production because the transferred-value contained within the worker or other means of production is fully returned to the owner as value within the work performed. The purchase price of workers is generally in the form of wages, benefits and pensions. Under nascent capitalism of the nineteenth century, the approximate value put into workers and the amount necessary to sustain them at a given standard of living over a lifetime reflected both the level of productivity, the class struggle within a country and other factors such as war and peace and colonialist robbery. Under imperialism, robbery of the oppressed countries has become an even bigger factor, especially in determining the standard of living of the middle strata. A big change or problem has arisen under monopoly capitalism over the realization of workers' use-value. Much of the value now put into workers occurs socially through public education, health care and other social means. Most of this value is financed through the public treasury even when it is delivered for private gain. The equivalent exchange-value of workers when purchased should include a portion that is returned to the public treasury to realize the value society has put in the working class. Owners of capital, led by the big monopolies, generally refuse to do this and instead leave it to taxes mostly on individuals as income tax, sales, property taxes and user fees etc. This turns the world upside down. Public revenue mostly collected from the working class and small and medium-sized business goes to pay the rich, to finance the workings of the most powerful global monopolies, which have politicized their private interests and depoliticized the public interest. The use-value of workers is transferred into production through their work-time; the owners of the work and the transferred-value have not paid for the full value of the transferred-value contained within the work, but when the work is realized, the owners of the work keep the full amount and refuse to reimburse the public treasury and its social programs for the value they have put in the working class. This is unsustainable. Could you elaborate more on added-value? The additional value workers produce beyond their transferred-value is now called added-value. The added-value beyond the transferred-value and the fight over its ownership, control and use go to the heart of the contradiction between workers and capitalists; to the issue of who decides and controls the direction of the economy, the actual producers or those who have usurped power and control by force; to the contradiction between the existing capitalist system, where owners of capital control the added-value either as their own or through their state, and the socialist system where the actual producers, the working class and its state own and control the added-value; to the basic contradiction propelling history and class struggle forward between the socialized forces of production and the private ownership and control of those socialized means of production. If the commodities workers produce are not sold or some other crisis hits the capitalist system or a particular company, the workers suffer the consequences even though it was not their fault. Yes, while we are on this subject of ownership and control, a word should be said on responsibility. Whether or not the production or service workers produce is realized or not is a concern for the working class but not their responsibility or their fault if not sold. Workers should not be punished for unsold production or services through layoffs, general insecurity or lowering of their standard of living. The capitalist state must ensure that workers have livelihoods and employment at all times and under all circumstances. An imbalance between supply and demand and other problems are no excuse to attack workers and allow relentless unemployment. The plague of unemployment must be made a relic of history. The disharmony in the economy originates in the refusal of owners of capital to recognize the social character of the forces of production and that the relations of production of private ownership of competing parts of the socialized economy do not allow for conscious planning and cooperation to play their necessary roles. If workers had control over the economy, then realization of production and services would be their social responsibility. Their duty would be to bring the human factor/social consciousness and scientific planning into play to ensure harmony between supply and demand and full employment at all times. As it stands under the control and narrow aim of owners of capital, the relation between supply and demand and other important features of the socialized economy are mostly out of control and a constant source of disruption generating crises for which workers are unjustly made to pay. (Part Two of this discussion goes into how the contradiction between use-value and exchange-value expresses itself within the economic sectors producing social programs, in particular education, health care and other services such as infrastructure. Modern social programs and public services are a feature of monopoly capitalism. The refusal of monopolies to realize the exchange-value from the social service sectors and even demand that the public treasury fully pay for those services to be delivered to monopolies free of charge has become a matter that must be addressed for the good of the public interest, the general interest of society and its very survival. It has become an important issue of opposing monopoly right by restricting it and rebelling against retrogression and class privilege. Other sectors of the socialized economy, especially those under the control of the monopolies must be forced to realize the production of social programs and public services, which they consume. This realization includes importantly the production of the human factor and the enormous value placed within human beings through social programs such as education and health care.) |